Senate GOP Budget Update: Week of March 7-11, 2016

Saturday, March 12, 2016

Below is a summary of some subcommittee activity from the past week:

Subcommittee #1 (Education)

Block (D-San Diego) Chair, Moorlach (R-Costa Mesa), & Allen (D-Santa Monica)

Career technical education deserves permanent funding.  Most education reform experts agree that California needs greater career technical education capacity.  A three-year program to incentivize local development of career technical programs was enacted last year, but more is needed.  In Committee this week, Senator Moorlach (R-Costa Mesa) strongly urged the Majority Party to enact a permanent, ongoing solution to career technical education funding needs.  Stay tuned…

Subcommittee #2 (Resources, Energy, Agriculture & Transportation)

Wolk (D-Davis) Chair, Nielsen (R-Gerber), & Pavley (D- Agoura Hills)

Phone Fees Increase as Program Goes Beyond Original Intent of Basic Support. The California Lifeline program was intended to provide essential, basic phone service to needy families, but Senate Republicans are concerned that the Governor is raising telephone fees by $282 million on hard-working families to expand the program beyond basic lifeline services.  This additional funding allows eligible households to subscribe to discounted wireless service plans that include non-essential text and internet services.  Providing essential phone service is a worthy cause but this program lacks annual eligibility verification requirements. There is no limit to the number of cell phones per residence.  Californians who buy their own cell phone plans will continue to be burdened with increased phone fees for programs that provide no direct benefit to them.  This program also had deficits of $96 million in 2014-15 and $143 million in 2015-16 due to increased subscribership numbers. Pursuant to the state constitution (Proposition 26), these “fees” should be considered a tax because the ratepayer is receiving no direct benefit.  Senator Nielsen (R-Gerber) raised concerns about the California Public Utilities Commission’s expansion of this program through its rule-making process and how that expansion has significantly increased costs for ratepayers. He further suggested a thorough review of the program’s benefits.  This item was held open for further discussion.

Inappropriate Use of AB 32 Fee.  In 2006, AB 32 was signed into law, despite opposition from Republicans and employers across the state, with the intent to achieve cost-effective reductions in greenhouse gas emissions (GHG) at 1990 levels by 2020. To help implement AB 32, the Costs of Implementation (COI) Fee was enacted in 2012 on specific industries that emit GHG, such as refineries. In his January budget, the Governor proposes to increase the COI Fee by $7.6 million annually to help implement SB 350 (de León 2015), which would require the California Energy Commission to increase the Renewable Portfolio Standards and energy efficiency savings by 50 percent by 2030.  There is no statutory authority to use the COI fee to meet new renewable and energy efficiency standards or to fund programs that meet expanded GHG emission targets by 2030 and 2050.  Senate Republicans will continue to monitor this issue.  This item was held open for future discussion.

Subcommittee #3 (Health & Human Services)

Mitchell (D-Los Angeles) Chair, Monning (D-Carmel), & Stone (R-Temecula)

Better Poverty Reduction Solutions.  While poverty reduction is a shared goal, Senate Republicans believe there are better solutions than relying solely on programs that do not provide people with the tools or incentives they need to break the cycle of poverty.  As opposed to a mindset of merely spending more and more and lengthening the time some people remain reliant on programs, as the Majority Party discussed at the hearing, Senate Republicans believe in implementing meaningful reforms to give people the dignity of independence. This includes SB 659 (Bates, 2015) and addressing core causes, such as state and local policies that can increase housing costs by 15 to 30 percent and regulations that make life’s basic needs more expensive for working families.

Subcommittee #4 (Housing, Veterans Affairs, & General Government)

Roth (D-Riverside) Chair, Nguyen (R-Garden Grove), & Pan (D-Sacramento)

Controlled Substance Utilization Review and Evaluation System (CURES) Update.  State bureaucracy may be raising roadblocks as pharmacists try to comply with state requirements.  The CURES is a database managed by the state Department of Justice (DOJ) that tracks controlled substances.  Pharmacists are required to register for system access by July 1, 2016, yet about 42 percent of licensed pharmacists are not yet registered.  Senator Nguyen (R- Garden Grove) pointed out that CURES is not a well-functioning system and that the low registration may be the fault of or the result of flaws in the system.  Licensees may be trying to comply but are unable to register and are unable to reach a live person or even leave a voicemail message when seeking assistance from the DOJ.  In these instances, licensees should not be penalized for non-compliance.  The Board of Pharmacy made the commitment to assist in any way possible.  Senate Republicans will continue to monitor this issue and others to ensure that the state minimizes obstacles and bureaucracy when setting requirements for pharmacists and other businesses.

Assistance to California Veterans Paying Off.  Recent state efforts to assist veterans are paying off, and Senate Republicans believe the state should build on these successes.  The subcommittee discussed the state’s partnership with County Veterans Service Offices (CVSOs) and evaluated the use of “Strike Teams” that assist veterans at the three U.S. Department of Veterans Affairs (USDVA) Regional Benefit Offices located in California.  The CVSOs are instrumental in assisting California veterans in filing benefit claims with the federal USDVA.  Beginning in 2013-14, the budget included an increase of $3 million annually to fund the 54 CVSOs throughout the state, spurring outreach efforts to get California veterans the benefits to which they are entitled.  However, the USDVA had a backlog of about 70,000 entitlement claims in the three regional offices in California. To benefit California veterans, the 2013-14 budget also included $3 million annually to fund Strike Teams to be stationed in the federal regional offices and prepare veterans’ benefit claims for expedited review by the federal USDVA. Strike Teams also provided training to the CVSOs to ensure that new claims being submitted were complete and accurate.  As a result, the backlog today is less than 7,000 and claims wait times average 126 days for the three offices, down from an average of over 500 days in July of 2013.  The processing of these claims resulted in over $101 million in lump sum retroactive payments and $167 million in annual benefit payments for California veterans.  While some are claiming victory others argue that the work is not complete.  There are other federal backlogs in the California regional offices, particularly in appeal cases where the backlog consists of more than 16,000 cases.  While this is a federal problem, it ultimately affects California’s veterans, economy, and state benefit programs.  The expense of $3 million annually to assist in this workload would be more than offset by getting our veterans the federal benefits to which they are entitled.  Senate Republicans believe consideration should be given to continuing this program on a limited-term basis, allowing for the program to be evaluated periodically, ensuring it makes sense for California.

Subcommittee #5 (Revenue, Labor, PERS, STRS, Public Safety, & Judiciary)

Hancock (D-Berkeley) Chair, Anderson (R-San Diego), Beall (D-San Jose)

Backlog Remains in Preventing High-Risk People from Keeping Guns.  Despite declaring this issue “a priority” for Attorney General Harris, a report released by the Department of Justice in March 2015 revealed a failure by Attorney General Harris and her staff to address a backlog of cases in the Armed Prohibited Persons System (APPS).  APPS is a database of about 12,000 firearm owners who legally purchased a firearm but, subsequent to their legal purchase, committed a felony or a violent misdemeanor, were diagnosed with serious mental illness, or became the subject of a restraining order that prohibits them from legally possessing a firearm.  In 2013, the Legislature appropriated $24 million to DOJ to eliminate the backlog within 1-3 years.  It has been three years and the backlog remains, most of the money has been spent, and the Attorney General is now asking for an increase in permanent positions and funding for the APPS program without any clear plan for how to address the backlog. Senator Nielsen criticized the lack of progress without proper explanation of how the department nearly depleted the budget, and now they are asking for additional permanent funding without accountability of how they will reduce that backlog.

Please refer media questions to Jacqui Nguyen at (916) 651-4016